Against a background of generally weaker markets in Europe, the FTSE 100 gained 0.2% or 8 points in a day of many conflicting signals on the corporate and economic from around the world. London benefited from better-than-expected results from Smith & Nephew but the S&P 500 Index fell back by almost 0.8% on a weak manufacturing index number for April from the U.S. Institute for Supply Management.
Among the FTSE 100 Index sectors, mining was under pressure as news filtered out that Indonesia is to ban some exports of raw materials and introduce a tax on ore shipments. This and comments by the major companies that uncertain trading prospects was prompting them to cut back on expansion plans left stocks like Rio Tinto (-2.2%) and BHP (-1.1%) lower.
This mood also permeated into Weir Group which supplies equipment to the sector with the shares closing 3.8% lower on the day. Antofagasta closed 4.4% lower on a disappointing production report. Among energy plays, a notable faller was BG Group which closed 1.8% lower at £14.24 despite announcing good first-quarter figures and its intention to sell its majority interest in Brazilian gas company, Comgas, for $1.8 Billion.
On the positive side, Smith & Nephew rose 4% on its first-quarter results which showed above-estimate earnings per share at 19.5 U.S. cents. Positive corporate developments put British American Tobacco and Imperial Tobacco higher, together accounting for 5.4 index points. Favourable sentiment also pushed GlaxoSmithKline and Diageo shares higher, equivalent to another 5 index points.
Disappointment with the data reported by the Institute for Supply Management for April which showed that the rate of growth in the services sector had slowed more than expected prompted yet another re-think about the state of the U.S. economic recovery after the improving manufacturing trend suggested earlier in the week. The ISM Index fell to 53.3 from 56.0 declared for March. During the day, several large retail chains revealed missed sales targets.
Among the leading S&P 500 Index constituents, Apple, Exxon, Chevron and General Electric were notable losers with falls ranging between 0.6% and 1%. Spectacular among fallers, Green Mountain Coffee Roasters shares fell by 48% to just under $26 on disappointment with the second-quarter results and accompanying prospects downgrade. Against the general run of play, Google and Procter & Gamble gained 0.6% and 0.8%, respectively.
Markets have started Friday with a weaker tone as they brace themselves for the U.S. non-farm payroll numbers due later today. The most recent expectations are for growth in jobs of around 120,000 – down from 165,000 only yesterday – with unemployment coming in at 8.2%. The March figure was a disappointing 120,000 so some catch-up is hoped for.
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